In April, the value of exports grew 11.7 per cent to $9.2 billion while imports stood at $9.76 billion, an increase of 0.3 per cent.

However, the trade deficit saw a significant drop of 78.09 per cent to $955.2 million in the first four months of the year, compared with $1.48 billion in the same period last year.

Bank of Thailand Governor MR Pridiyathorn Sonakul dismissed concerns over a return of the deficit, saying the government had anticipated a deficit for the year and that a red number in a single month was therefore acceptable.

He said he did not know whether the current account would also be in deficit in April, but added that the tourism situation had improved significantly.

The central bank has projected that the trade deficit this year will be $5 billion-$7 billion, while the current account will be in a range of plus or minus $2billion.

The trade deficit resurfaced amid the increases in oil prices, as well as the baht's appreciation against the US dollar.

Pornsilp Patcharintanakul, deputy secretary-general of the Board of Trade of Thailand, said the continued currency appreciation would affect export competitiveness.

"Continued baht strength will also hit export figures next month," he said. Meanwhile, Kartchai Jamkajornkeiat, vice president of the Thai Garment Manufacturers Association, said the drop in export value in April was not a result of the baht's appreciation as most orders for the month had been placed last year.

He said the impact of the stronger unit would, however, be seen in the textile sector in the next three to six months.

Aside from textiles, other goods that have suffered from a lower export income are shrimp, for which there was lower demand. However, the export value of electronic goods, hard disk drives, canned tuna and chicken showed growth.

Pridiyathorn insisted the baht was more stable than exporters perceive and that the degree of appreciation against the US dollar has weakened, which he claimed would buoy the country's export competitiveness.

Since the beginning of the year, the baht has strengthened 6.8 per cent against the greenback, compared with 7.4 per cent against the euro, he said.

Caretaker Commerce Minister Somkid Jatusripitak said that in order to boost exports, trade officials had been instructed to speed up free-trade agreement negotiations with trading partners after talks on some pacts were suspended.

In addition, Somkid will discuss with caretaker Prime Minister Thaksin Shinawatra whether the Kingdom should ink a free-trade agreement with Japan.

"Despite a caretaker government, all officials have to focus on their jobs as normal to reassure people that there is still economic growth and a smooth administration," he said.

The minister said targeted export growth of 17.5 per cent to $130 billion remains unchanged this year despite the economic slowdown.

"Two key factors that the country should focus on are people's cost of living and the trade balance," he said.

Karun Kittisataporn, permanent secretary at the Commerce Ministry, said April trade's deficit was not surprising due to the spiralling oil price.

The ministry is still confident the trade deficit will not exceed $6 billion, as predicted this year. April marked the worst month for export growth since the beginning of the year.

Chantra Purnariksha, director-general of the Export Promotion Department, said the fall in export value was due to the baht's appreciation in the manufacturing sector, mainly on textiles, electrical appliances and air conditioners.

She said the strength of the baht had also reduced demand for Thai goods in some markets, particularly the United States.

The director-general of Foreign Trade Promotion, Rachane Potjanasuntorn, said fuel imports had increased last month, both in value - by 54.5 per cent - and volume, up by 10 per cent.

The crude-oil import volume also rose by 882,509 barrels per day, from 760,370 barrels.

Meanwhile, gold imports touched of $406.43 million in the first four months, a fall of 62.47 per cent year on year.

Petchanet Pratruangkrai

The Nation